When you aim to reap the most rewards from a credit card, you also try to maintain the fees as low as possible. Therefore, you want a product that has no annual fees, the first-year free or a way to get a recurrent credit card fee waiver if you wish to keep it in the long term.
How to Benefit From a Credit Card Fee Waiver
All major financial institutions in Canada offer banking packages (from basic to premium) to their clients. Usually, people will not analyze them from the perspective of getting a credit card fee waiver but mostly to have free and unlimited transactions and withdrawals. Yet, when you look into the perks of premium accounts, you will see that they offer a credit card fee waiver or rebate.
This can be interesting for the ones you wish to retain in your wallet for a long time to keep the cost on the lower end and maximize rewards.
Indeed, some give amazing rewards but their value is often pulled down by the annual fees you have to pay; except for the first year where it’s usually free in addition to a generous welcome bonus, it can be more difficult to justify paying annual fees over time.
Sure, there is great insurance, lounge access, free luggage, e-upgrade rollovers, etc., that are often worth more than what you are paying for the card. But you should look into banking accounts that will offer a credit card fee waiver for your favourites.
For example, the World Elite Mastercard from National Bank has excellent insurance, but you remain covered only as long as you hold the card. What if your trip is far away, or what if your refrigerator breaks down after the manufacturer’s warranty is expired? A credit card fee waiver is just another way to save since you plan to keep the card over the first-year free window.
The cost of getting a credit card fee waiver
The premium banking packages that offer a credit card fee waiver come with a monthly fee of about $30; paying $360 annually makes little sense to avoid your $150 credit card annual fee.
However, there is a way to obtain free banking by keeping a minimum balance in your account of around $5,000 (specific amounts according to each institution are detailed further).
Therefore, the true price of escaping banking fees and gaining a credit card fee waiver is the opportunity cost of having that money parked. That sum has to stay idle and can’t be used for other purposes that would give a higher return, such as being invested.
If we do so math, maintaining a $5,000 balance to get a credit card fee waiver worth $150 translates to a 3% return. To compare, Tangerine often has promotional rates for its savings account; there is a 5% interest offer on new deposits until June, and TFSA accounts are eligible.
Some financial institution also gives a partial rebate or free banking for seniors, students and some professionals. For example, physicians pay no fee for their accounts and have an ongoing credit card fee waiver with the National Bank.
Banks That Offer Credit Card Annual Fee Waiver
Through their products, each of Canada’s major banks provides multiple ways to reduce the cost of a credit card. However, packages are far from equal as the requirements to get a credit card fee waiver are very different from one institution to another.
National Bank of Canada
National Bank clients who hold either The Connected or The Total accounts will receive a credit of $30 or $150 on their statement, respectively. Many National Bank credit cards are eligible, including the World Elite Mastercard from National Bank. The offer applies only for the first year and the primary cardholder.
They both have monthly fees; The Connected account waives them if you maintain a minimum balance of $4,500. As for The Total, the minimum balance to get it waived is $6,000.
Milesopedia has a great exclusive offer for the World Elite Mastercard from National Bank card, and it’s a product worth keeping in the long term because of its superior insurance and recurring 150$ travel credit. Indeed, when you book a plane ticket with points, you can benefit from their coverage by paying only the tax portion.
Additionally, the National Bank also has exciting offers for members in various fields such as healthcare, engineering, etc. Many careers are eligible for a waiver on checking account fees (without having to keep a minimum balance), and the following are subject to a credit card fee waiver year after year:
Clients of the Bank of Montreal Performance Plan and of the Premium Plan can get either a credit or a total credit card fee waiver, respectively.
With the Performance Plan package, you can receive a $40 rebate on your credit card fee, and you are subject to a monthly fee unless you can park $4,000 in your account.
On the other hand, the Premium Plan waives the fee by maintaining a $6,000 minimum balance and offers an entire credit card fee waiver on the BMO product of your choice for the primary cardholder:
The BMO Ascend™ World Elite®* Mastercard®* and the BMO AIR MILES®† World Elite®* Mastercard®* are great for travellers into rewards programs as you can benefit from their travel insurance even if you didn’t put the whole trip amount on the card.
They are the only credit cards that allow that, along with the World Elite Mastercard from National Bank. Therefore, getting a credit card fee waiver on them brings substantial savings in the long term.
With a CIBC Smart Plus checking account, you can get a credit card fee waiver on the following cards:
The credit card fee waiver on the premium cards is $139, while you get the full reimbursement on the lower tier products. For authorized users, you can receive a $50 rebate for each person, up to three cards.
As for the CIBC Smart Plus fees, you can waive them by keeping $6,000 in your account. Furthermore, you can avoid those banking fees if you have over $100,000 in eligible savings and investments.
Two of TD’s banking packages offer a credit card fee waiver: Unlimited Checking and All-Inclusive Banking. The former only has a credit card fee waiver for the first year, which is not really interesting since most TD Credit Cards already come with a first-year-free offer with their welcome bonus.
TD’s All-Inclusive Banking, on the other hand, gives a recurrent rebate (primary cardholder + one authorized user) on the following credit cards, and you can avoid the monthly fee by maintaining a minimum balance of $5,000:
Even with the All-Inclusive Banking package, the TD® Aeroplan® Visa Infinite Privilege* Card is not eligible for a partial credit card fee waiver, sadly.
For points enthusiasts, holding a TD® Aeroplan® Visa Infinite* Card long-term has many benefits, such as better redemption rates, a free checked bag on Air Canada, travel insurance when redeeming your Aeroplan points, etc.
Aeroplan also tightened its policy on the number of bonuses you can reap, so it makes more sense to keep it year after year. Therefore, the possibility of having a credit card fee waiver with a checking account is great!
Between CIBC’s 6,000$ and TD’s 5,000$ minimum requirement for the bank and credit card fee waivers, I’d choose TD for obvious reasons.
RBC’s Signature No Limit Banking (at $16.95 per month) and VIP Banking (at $30 per month) package comes with a credit card fee waiver in the form of a $48 rebate on the former and a total rebate on the latter for many credit cards:
In addition, VIP Banking offers a $120 discount on the RBC Avion Visa Infinite Privilege.
Unfortunately, there is no way of avoiding the monthly banking fees with RBC by keeping a minimum balance in your account. However, you can get a rebate on your banking fee for specific people (such as seniors or students) or when you hold different products at RBC, such as a mortgage or investments.
Since you must pay a monthly fee to benefit from a credit card fee waiver, it doesn’t make much sense to open an RBC account for that sole purpose.
The HSBC World Elite® Mastercard® is among the favourite credit cards without foreign exchange fees since there is also a $100 annual travel credit. Therefore, the HSBC World Elite® Mastercard® truly cost $49.
You can get a $25 rebate on your credit card fee by being an Advance tier client, $50 by being a Premier client and an entire credit card fee waiver if you are a Private client.
With the discounts for Advance and Premier clients, the card will cost $24 and $1, respectively. As for Private clients, the credit card fee waiver will gain them a nice $100 annually.
You must meet specific criteria and stringent requirements to be eligible for HSBC’s Advance, Premier, or Private banking tiers and their various benefits.
For example, to qualify as a Premier client, you must check one of the following:
- A minimum balance of $100,000 or more
- Monthly deposits of at least $6,500 + minimal investments of $100,000 in other Canadian financial institutions
- At least a $500,000 mortgage at HSBC
- Be eligible for Premier in another country
Scotiabank also offers exciting travel and everyday cards. So, it’s worth looking into their banking packages to get a credit card fee waiver on that keeper year after year.
The Scotiabank Preferred Package (first year only) and the Scotiabank Ultimate Package will give a credit card fee waiver on these cards:
The Scotiabank Passport Visa Infinite* Card is another favourite to save on foreign exchange fees in addition to giving you multiple lounge access, while the Scotia Momentum® VISA Infinite* Card and Scotiabank Gold American Express Card have high returns on organic spending such as groceries and on every gift card you can find there.
To qualify for a banking fee waiver, you must maintain a $4,000 balance with the Scotiabank Preferred Package and $5,000 with the Scotiabank Ultimate Package. If you already hold a Scotia credit card, you can get the full reimbursement of what you paid when you open one of those checking accounts.
The requirements to qualify for free banking and a credit card fee waiver or rebate are similar from one financial institution to another ranging from maintaining a minimum balance of around 5,000 or $6,000 to holding investments and mortgages with them.
In addition, students, seniors and a wide array of professions can be eligible for banking discounts and credit card fee waivers.
Since many credit cards offer the first-year free anyways, along with a generous bonus, the best strategy would be to choose the credit card product you wish to keep in the long term beforehand. Then, you can investigate which banking package is the most interesting to seek in your situation.